The UK government cut a buying incentive for electric cars, buses, and trucks from 3,000 pounds to 2,500 pounds on Thursday, and lowered the price of models that qualify to less than 35,000 pounds. Customers of Tesla Inc. in the United Kingdom would have to pay more for Model 3s after the country’s limit on which electric vehicles are eligible for subsidies was reduced.
The UK government has been under pressure to close a gap in the country’s finances that the pandemic has created. It claims that even without subsidies, buyers of higher-priced EVs can afford to move from combustion-engine vehicles, and that the number of battery-powered models costing less than 35,000 pounds has risen by nearly 50 percent since 2019. While most Model 3 models were eligible under the previous limit of less than 50,000 pounds, none will be eligible under the new law.
The auto industry reacted angrily to the announcement, arguing that cutting subsidies is the wrong step at a time when registrations are still dropping due to closed showrooms and the virus’s economic effects. The European industry’s trade group announced this week that new-car registrations in February were at their lowest level since 2013, with the UK auto sector shrinking by 36 percent.
In a statement, Mike Hawes, chief executive officer of the Society of Motor Manufacturers and Traders, said, “This sends the wrong message to the consumer, especially private customers, and to an industry challenged to meet the government’s ambition to be a world leader in the transition to zero emission mobility.”
